Claims of Planet Hollywood and Flamingo Sales at Caesars Are Baseless

Fertitta Entertainment Inc. (FEI) is buying Caesars Entertainment (NASDAQ: CZR) for $17.6 billion. Large deals like this often generate rumors about asset sales in the industry. In recent days, it was suggested on the Las Vegas Reddit forum that Planet Hollywood could be put up for sale after the deal closes, on the grounds that the buyer would want to reduce its debt. A brief suggestion that Flamingo could also be sold was made. However, these claims are said not to reflect the facts.

Asset sales are expected to come up once the deal closes. These could include a property on the Strip or Golden Nugget's facility in downtown Las Vegas. Tom Reeg, the CEO expected to lead the combined company, has indicated that some asset sales may take place. According to Reeg, these transactions will not be major news.

The claim about selling Planet Hollywood is not new. A similar rumor surfaced in 2021 but quickly faded. The hotel's importance as a significant revenue source for Caesars may have played a large part in this. MGM Resorts International (NYSE: MGM) was also mentioned on Reddit as a possible buyer. However, since MGM is already the largest operator on the Strip, this possibility seems unlikely.

Flamingo presents a similar picture. In 2022, it was reported that Caesars had put the property up for sale. The $1 billion price reported in the news was not confirmed, and potential buyers were not willing to meet that price. At the time, people discussed the need for renovations at the property and how leaving the Caesars Rewards program would affect the hotel. Caesars later made a commitment regarding the property's maintenance.

There is an important detail about the sale of Planet Hollywood and Flamingo. The land under these hotels belongs to Caesars, not VICI Properties (NYSE: VICI). VICI is Caesars' main tenant and the largest owner of casino land in Las Vegas, and it also owns the land under Caesars Palace and Harrah's on the Strip. Some buyers prefer properties without long-term lease obligations. On the other hand, in 2019 Eldorado Resorts, in its offer for the former Caesars, gave VICI a right of first refusal on several Caesars hotels on the Strip, including Flamingo and Planet Hollywood.